Unilever 1999 Annual Report Download - page 30

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Unilever Group Notes to the consolidated accounts
32 Financial instruments (continued)
The undernoted table summarises the fair values and carrying amounts of the various classes of financial instruments as at 31 December.
Fl. million Fair value Carrying amount
1999 1998 1999 1998
Financial assets:
Other fixed investments 269 294 238 257
Current investments 3 254 10 870 3 254 10 870
Cash 8 807 12 011 8 807 12 011
12 330 23 175 12 299 23 138
Financial liabilities:
Bonds and other loans (6 083) (6 422) (6 002) (6 082)
Bank loans and overdrafts (4 551) (4 064) (4 551) (4 064)
(10 634) (10 486) (10 553) (10 146)
Derivatives:
Interest rate swaps – assets 71 362 ——
– liabilities (131) (119) 3(44)
Forward rate agreements – liabilities ——(3) (3)
Foreign exchange contracts – assets 92 66 (284) (190)
– liabilities (376) (256) ——
The fair values of fixed investments are based on their market value. The fair values of forward foreign exchange contracts represent the
unrealised gain or loss on revaluation of the contracts to year-end rates of exchange. The fair values of bonds and other loans, interest
rate swaps and forward rate agreements are based on the net present value of the discounted anticipated future cash flows associated
with these instruments.
Currency exposures
Group treasury manages the foreign exchange exposures that arise from the Group’s financing and investing activities in accordance with
Group policies.
The objectives of Unilever’s foreign exchange policies are to allow operating companies to manage the foreign exchange exposures that
arise from trading activities effectively within a framework of control that does not expose the Group to unnecessary foreign exchange
risks. Operating companies are required to cover substantially all foreign exchange exposures arising from trading activities and each
company operates within a specified maximum exposure limit. Business Groups monitor compliance with these policies. Compliance with
the Group’s policies means that the net amount of monetary assets and liabilities at 31 December 1999 that are exposed to currency
fluctuations is not material.
30 Unilever Annual Accounts 1999